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No 10 tries to limit damage over Balls' bleak vision for UK
Paul Waugh10 Feb 2009
Labour's recession woes deepened today as the Tories seized on an admission from Ed Balls that Britain was facing the worst global downturn for "more than 100 years".
With a new opinion poll giving the Conservatives a huge lead, Downing Street scrambled to limit the damage from Mr Balls's claim that the impact of the financial crisis could last another 15 years.
Shadow chancellor George Osborne stepped up the attack as his party pounced on Mr Balls's admission that the banking crisis had erupted in part because the UK's financial regulation "wasn't tough enough" in recent years.Mr Balls, who was Gordon Brown's chief economic adviser when he was Chancellor, triggered the row with a speech to Labour party activists warning of the lasting impact of the recession.
He said: "People are quite right to say that financial regulation wasn't tough enough in Britain and around the world, that regulators misunderstood and did not see the nature of the risks and dangers being run in our financial institutions." He also raised fears that the downturn could spark a Thirties-style resurgence of the far-Right.
Mr Balls veered off the draft version of his speech to deliver easily the gloomiest assessment yet from a senior member of the Government. He said: "The reality is that this is becoming the most serious global recession for, I'm sure, over 100 years as it will turn out.
"The economy is going to define our politics in this region and in Britain in the next five years, the next 10 years and even the next 15 years."
A Downing Street spokesman moved to play down his remarks, claiming the Schools Secretary was describing the financial sector rather than the "real economy". The spokesman added: "He is not suggesting the impact on the real economy here or elsewhere will be worse than the Thirties."
But Mr Osborne said: "This is a very worrying admission from a Cabinet Minister. We are being told not only that we are facing the worst recession in 100 years, but that it will last for over a decade, far longer than Treasury forecasts predict."
Lib-Dem Treasury spokesman Vince Cable contrasted Mr Balls's dire assessment with more positive comments from fellow minister Baroness Vadera, who recently said she could see "green shoots" of economic recovery.
Mr Cable said: "Instead of giving clear and consistent leadership, Government ministers are oscillating between complacent optimism and this doom-laden picture of Armageddon. Surely the truth lies between the two?"
The Government's troubles over the recession will be underlined tomorrow when unemployment is set to hit two million.
Conservative leader Mr Cameron today demanded skills training to be widened to cope. "Our economy is shrinking. And there isn't just a hardcore of people not in work, education or training - we're in an era of mass unemployment," he said in a speech.
"We must do all that we can to help those who have been laid off to get back into work as soon as possible."
A Times/Populus poll today showed the Tories had opened up a 14-point poll lead over Labour.
Reader views (9)
Why is Parliament not firing these guys here in the UK?
- Phil, Islington, London, 10/02/2009 21:31
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A Labour minister who says one thing and then completely retracts it when his boss chastises him for not towing the party line, what a shocker......that makes him about number 150 in the long line of Nu Labour hypocrites. I would dearly love somebody in politics to actually stand up for what they believe. Even if you hated Thatcher you knew what she stood for and she saw things through to the end.
- Mark, London, 10/02/2009 17:28
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Considering the way this Government has dumbed down history in our schools ( along with everything else)especially under the leadership of Mr Balls, I am of the opinion he doesn't even realise that the great depression of the 1930's was less than 100 years ago. Yet another great example of buffoons running the country into the ground.
- Linda, London, 10/02/2009 17:16
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Not really much to do with the Schools Secretary, is it? Mind you, with the expenses he draws perhaps he should do more then one job.
- Robin, Brentford, UK, 10/02/2009 16:29
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This guy could not tell you what day it is next tuesday.
- Alex, brighton, 10/02/2009 16:27
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It does smack of him vying for the labour leadership but as inept as Brown is, he's a genius compared to Balls.
- Bob, Cheam, 10/02/2009 16:03
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But if he was not in politics who on earth would employ him?
- Mic, Famalicao, Portugal, 10/02/2009 15:31
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Balls new exactly what he was doing. It was his first serious foray for the Labour leadership but he deludes himself I think!
- David Lewis, Oxford UK, 10/02/2009 14:21
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A total irresponsible -- whatever the reality behind what he said. The man shouldn't be in politics.
- Phil Jones, London UK, 10/02/2009 11:31
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